European ethylene markets faced a sharp correction on Tuesday, as prices plunged under the weight of subdued demand and persistent oversupply. According to a source in Europe, the downturn was driven by sluggish buying activity, with converters holding back purchases amid broader macroeconomic headwinds. Elevated interest rates and ongoing inflationary pressures have dampened industrial confidence, further limiting spot demand.
Despite efforts by European producers to trim operating rates and reduce output, the market continued to grapple with excess supply. This imbalance between production and consumption proved decisive in pushing prices lower across the region. Ethylene values were assessed at USD 735–745/mt on a CIF NWE basis, marking a steep day-on-day decline of USD 80/mt. On an FD NWE basis, prices registered at EUR 675–685/mt, a drop of EUR 65/mt compared with Monday’s levels.
Industry participants observed that the scale of the fall highlights the difficulty producers face in aligning supply with contracting demand, particularly in a region where petrochemical margins have been under sustained pressure. The slump also underscores the growing influence of broader economic conditions on chemical markets, as downstream buyers remain hesitant to commit to forward purchases.
In contrast, ethylene prices in Asia held firm. On Tuesday, CFR North East Asia assessments were steady at USD 835–845/mt, unchanged from the previous session. The stability in Asian benchmarks suggests a divergence in regional fundamentals, with healthier consumption patterns and relatively balanced supply-demand dynamics supporting price resilience in the East.
The widening spread between European and Asian ethylene values may encourage arbitrage opportunities, though logistics constraints and cost considerations could temper the feasibility of such flows. Looking ahead, market watchers suggest that unless European demand shows signs of recovery, pricing pressure is likely to persist, challenging producers’ ability to maintain margins through the remainder of the quarter.
